Recursion(RXRX) - 2025 Q2 - Quarterly Results

Executive Summary and Q2 2025 Highlights Recursion reported Q2 2025 financial results, business updates, and CEO statements, highlighting platform power and clinical program progress Q2 2025 Highlights and CEO Statement Recursion reported Q2 2025 financial results and business updates, including a $7 million Sanofi milestone and progress on clinical programs REC-1245 (RBM39) and REC-617 (CDK7) - Achieved fourth partnered discovery milestone with Sanofi, reflecting tangible momentum across the joint pipeline[3] - The platform's power allows for discovery and development of potential new medicines and insights on patient populations, leveraging advanced models like Boltz-2 for rapid ligand design[3] Summary of Business Highlights Recursion provided updates on its internal and partnered programs, including clinical advancements, new acquisitions, and significant platform developments Portfolio - Internal and Partnered Programs Recursion provided updates on its internal pipeline, including REC-1245 (RBM39 degrader) and REC-617 (CDK7 inhibitor) with refined patient population strategies, and the acquisition of full rights to REC-102 (ENPP1 inhibitor) Internal Pipeline Updates Recursion advanced several internal programs, including REC-1245 (RBM39 degrader) with ongoing Phase 1/2 DAHLIA study enrollment and early safety/PK data expected in 1H26 - REC-1245 (RBM39 degrader) Phase 1/2 DAHLIA study is enrolling select tumor types to identify responsive populations, with early safety and PK data from dose-escalation on track for 1H26[5][6][8] - REC-617 (CDK7 inhibitor) initiated a combination dose escalation portion of the ELUCIDATE Phase 1/2 trial in 1H25, selecting platinum-resistant ovarian cancer as the first combination cohort based on clinical, preclinical, and causal AI modeling data[5][8] - Acquired full rights to REC-102 (ENPP1 inhibitor) for hypophosphatasia (HPP), with Phase 1 initiation on-track for 2H26 and preclinical data to be presented at ASMBR 2025[8] - Additional data for REC-4881 (MEK1/2) in FAP from TUPELO is expected in 2H25[8] Partnered Discovery Updates Recursion's collaborations yielded significant progress, including a $7 million milestone payment from Sanofi for an immunology program, marking the fourth such milestone in 18 months - Achieved a $7 million milestone payment from Sanofi in Q2 2025 for an immunology program, marking the fourth partnered program reaching a significant discovery milestone in 18 months[10] - Potential for over $100 million in partnership milestones by the end of 2026, with several programs advancing towards potential development candidate designation over the next 12-15 months[10] - The Roche and Genentech collaboration has built a whole-genome knockout phenomap from over one trillion iPSC-derived neural cells and identified potential neuroscience targets for validation[10] - Bayer collaboration nominated multiple early discovery precision oncology programs against previously 'undruggable' targets, with work underway to advance them to lead series milestone decisions[10] - Collaboration with Merck KgAa, Darmstadt, Germany, is ongoing to identify first-in-class and best-in-class targets[10] Platform (Recursion OS 2.0) Recursion OS 2.0 continues to drive program development across biology, chemistry, and clinical development, expanding its Virtual Cell and releasing the open-source Boltz-2 model - Recursion OS 2.0 is driving program development with applications across biology, chemistry, and clinical development[13] - Released Boltz-2 open-source model, which is over 1,000 times faster than physics-based FEP calculations for binding affinity prediction and has been downloaded by over 40,000 unique users[15] - Expanding the Virtual Cell to understand and predict cellular behavior across a wider range of biology, incorporating diverse cell types and disease areas beyond oncology[15] - Expanding ClinTech platform by integrating high-quality, linked patient datasets (Tempus, HealthVerity, and Helix) to strengthen programs, bolster preclinical and early clinical data, and optimize recruitment[15] Second Quarter 2025 Financial Results Recursion reported increased Q2 2025 revenue but also significantly higher R&D and G&A expenses, leading to a widened net loss, with cash runway extending into Q4 2027 Key Financial Metrics Summary Recursion's Q2 2025 revenue increased to $19.2 million, up from $14.4 million in Q2 2024, while R&D and G&A expenses significantly rose, resulting in a net loss of $171.9 million Q2 2025 Key Financial Metrics Comparison (YoY) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (YoY) | | :--------------------------- | :----------------- | :----------------- | :----------- | | Total Revenue | $19.2 | $14.4 | +33.3% | | Research & Development Exp. | $128.6 | $73.9 | +74.0% | | General & Administrative Exp.| $46.7 | $31.8 | +46.9% | | Net Loss | $(171.9) | $(97.5) | -76.3% | - Cash, cash equivalents and restricted cash were $533.8 million as of June 30, 2025, compared to $603.0 million as of December 31, 2024[15] - Based on current operating plans, the Company believes that its expected cash runway will extend into the fourth quarter of 2027[15] - Net cash used in operating activities was $208.4 million for the six months ended June 30, 2025, compared to $184.5 million for the same period in 2024, primarily due to the inclusion of Exscientia's operations[18] - The Company expects to incur costs totaling $9.3 million in 2025 for restructuring activities, of which $3.9 million has been paid in Q2 2025[18] Consolidated Statements of Operations (Unaudited) The consolidated statements of operations show a significant increase in total revenue for both the three and six months ended June 30, 2025, compared to the prior year, alongside substantially rising operating costs and expenses Consolidated Statements of Operations (Unaudited) - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $19,223 | $14,417 | $33,968 | $28,211 | | Total operating costs and expenses| $195,450 | $114,960 | $401,563 | $225,094 | | Loss from operations | $(176,227) | $(100,543) | $(367,595) | $(196,883) | | Net loss | $(171,897) | $(97,540) | $(374,384) | $(188,913) | | Net loss per share (basic & diluted)| $(0.41) | $(0.40) | $(0.91) | $(0.79) | | Weighted-average shares outstanding| 417,361,147 | 242,196,409 | 410,268,199 | 239,107,879 | Condensed Consolidated Balance Sheets (Unaudited) The condensed consolidated balance sheet shows a decrease in total assets from $1,448.598 million at December 31, 2024, to $1,302.355 million at June 30, 2025, primarily driven by a reduction in cash and cash equivalents Condensed Consolidated Balance Sheets (Unaudited) - June 30, 2025 vs December 31, 2024 | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $525,110 | $594,350 | | Total current assets | $587,160 | $714,269 | | Total assets | $1,302,355 | $1,448,598 | | Total current liabilities | $164,026 | $187,472 | | Total liabilities | $383,209 | $413,816 | | Total stockholders' equity | $919,146 | $1,034,782 | About Recursion Recursion is a clinical-stage TechBio company leveraging its OS platform to decode biology and discover new medicines at massive experimental and computational scales Company Overview Recursion is a clinical-stage TechBio company that decodes biology to improve lives by leveraging its Recursion OS platform, which integrates diverse technologies to generate vast proprietary datasets - Recursion is a clinical stage TechBio company leading the space by decoding biology to radically improve lives[16] - The Recursion OS platform continuously generates one of the world's largest proprietary biological and chemical datasets, leveraging sophisticated machine-learning algorithms to distill trillions of searchable relationships[16] - The company operates at massive experimental scale (up to millions of wet lab experiments weekly) and massive computational scale (owning and operating one of the most powerful supercomputers in the world)[16] Forward-Looking Statements This section outlines forward-looking statements regarding Recursion's future plans, subject to inherent risks and uncertainties in pharmaceutical R&D and financial outlook Disclaimer and Risk Factors This section contains forward-looking statements regarding Recursion's future plans, including drug discovery and development, clinical trial timelines, partnership milestones, platform enhancements, and financial outlook - Forward-looking statements include those regarding Recursion's ability to discover and develop medicines, timing of data readouts, impact of preclinical data, future as a TechBio leader, and financial position and cash runway[23] - These statements are subject to known or unknown risks and uncertainties, including challenges inherent in pharmaceutical research and development, financing, regulatory approval, intellectual property protections, and cyberattacks[23] - Recursion undertakes no obligation to correct or update any such statements, whether as a result of new information, future developments, or otherwise, except to the extent required by applicable law[23]